Correlation Between Tienlen Steel and Saigon Telecommunicatio
Can any of the company-specific risk be diversified away by investing in both Tienlen Steel and Saigon Telecommunicatio at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Tienlen Steel and Saigon Telecommunicatio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tienlen Steel Corp and Saigon Telecommunication Technologies, you can compare the effects of market volatilities on Tienlen Steel and Saigon Telecommunicatio and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Tienlen Steel with a short position of Saigon Telecommunicatio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tienlen Steel and Saigon Telecommunicatio.
Diversification Opportunities for Tienlen Steel and Saigon Telecommunicatio
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Tienlen and Saigon is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Tienlen Steel Corp and Saigon Telecommunication Techn in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saigon Telecommunicatio and Tienlen Steel is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Tienlen Steel Corp are associated (or correlated) with Saigon Telecommunicatio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saigon Telecommunicatio has no effect on the direction of Tienlen Steel i.e., Tienlen Steel and Saigon Telecommunicatio go up and down completely randomly.
Pair Corralation between Tienlen Steel and Saigon Telecommunicatio
Assuming the 90 days trading horizon Tienlen Steel Corp is expected to under-perform the Saigon Telecommunicatio. But the stock apears to be less risky and, when comparing its historical volatility, Tienlen Steel Corp is 1.32 times less risky than Saigon Telecommunicatio. The stock trades about -0.59 of its potential returns per unit of risk. The Saigon Telecommunication Technologies is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 1,500,000 in Saigon Telecommunication Technologies on August 29, 2024 and sell it today you would lose (15,000) from holding Saigon Telecommunication Technologies or give up 1.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tienlen Steel Corp vs. Saigon Telecommunication Techn
Performance |
| Timeline |
| Tienlen Steel Corp |
| Saigon Telecommunicatio |
Tienlen Steel and Saigon Telecommunicatio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tienlen Steel and Saigon Telecommunicatio
The main advantage of trading using opposite Tienlen Steel and Saigon Telecommunicatio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tienlen Steel position performs unexpectedly, Saigon Telecommunicatio can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Saigon Telecommunicatio will offset losses from the drop in Saigon Telecommunicatio's long position.| Tienlen Steel vs. FIT INVEST JSC | Tienlen Steel vs. Damsan JSC | Tienlen Steel vs. An Phat Plastic | Tienlen Steel vs. APG Securities Joint |
| Saigon Telecommunicatio vs. FIT INVEST JSC | Saigon Telecommunicatio vs. Damsan JSC | Saigon Telecommunicatio vs. An Phat Plastic | Saigon Telecommunicatio vs. APG Securities Joint |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the FinTech Suite module to use AI to screen and filter profitable investment opportunities.
Other Complementary Tools
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |